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Petitioners asserted that they went to the library and
researched Amway on their own, and that they reviewed various
Amway materials before beginning their participation in the Amway
activity. There is nothing in the record to support petitioners’
assertions. Moreover, the record does not reflect any indication
that the C.P.A. with whom they consulted had expertise in
marketing consumer products. We are not convinced that
petitioners conducted any meaningful independent research
concerning their Amway activity or that they sought to educate
themselves to overcome their lack of experience and expertise.
Sec. 1.183-2(b)(2), Income Tax Regs.
Petitioners each claimed to have spent approximately 10
hours a week pursuing Amway activities, though petitioner
occasionally spent additional time attending seminars on
weekends. Both petitioners held full-time jobs during the years
in issue. In addition, Ms. Ingram experienced health-related
problems during the years in issue that prevented her from
spending time in pursuit of the Amway activity. We conclude that
petitioners did not devote significant time to the Amway
activity. Elliott v. Commissioner, 90 T.C. at 972; sec. 1.183-
2(b)(3), Income Tax Regs.
Ms. Ingram testified that petitioners became involved in
Amway because they thought that it would be an asset that could
be sold, which would be valuable for estate planning.
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Last modified: May 25, 2011